February 23, 2024

1 in 4 Agents Grew Their Business Amid Downturn. Here’s How: Triple-I


For many real estate agents, a downturn wasn’t destiny in 2023, according to responses from hundreds of industry professionals in the latest Inman Intel Index survey.

This report is available exclusively to subscribers of Inman Intel, the data and research arm of Inman offering deep insights and market intelligence on the business of residential real estate and proptech. Subscribe today.

Was last year the worst ever for real estate?

For most agents, it wasn’t close to that bad — but it depends on who you ask. 

Intel heard from 586 agents in response to the December Inman Intel Index, or Triple-I, during the final days of 2023, a challenging year of contraction and stagnation throughout much of the real estate industry. By taking the pulse of the industry in this flagship gauge of real estate sentiment, Intel was able to cut through the mystery of how agents are navigating a market in transition.

These professionals painted a complex and textured picture of a real estate market where some agents suffered broad setbacks while others built bigger revenue streams and client networks in defiance of the fundamentals. 

Two of the key findings:

  • 1 in 4 agents surveyed said they managed to grow their business revenues in 2023.
  • But even for many of these agents, the gains were hard-won: 87 percent of all agent respondents said that last year posed some level of difficulty for their businesses.

Dive into the survey findings below to learn how some agents were able to beat the market — and why others were left behind.

A split experience

There’s no question that for the majority of agents, the past year represented either a setback or an opportunity to merely tread water.

But perhaps partly due to the stability of high U.S. home prices, very few remember it as the worst year of their career.

  • Only 14 percent of agent respondents described the 2023 market as the “most difficult of my career” for their business.
  • Still, another 24 percent of agents painted the picture of an extraordinarily difficult year that fell just short of the worst they had ever navigated. And 32 percent more described it as moderately difficult.

However, this leaves a number of agents who didn’t feel the brunt of the nationwide decline in transactions as mortgage rates remained elevated.

  • 30 percent of agents described 2023 either as only a bit difficult for their businesses, or not difficult at all.

The survey makes clear that for many agents, the downturn afforded enough opportunities that they were able to grow their businesses — their revenues, and even their deal counts and buyer pipelines.

Landing the deal vs. cashing the check

Existing-home sales have been in steady decline for two years now amid a higher-rate environment, and have shown little sign of recovery yet.

But that hasn’t stopped all agents from finding more opportunities for a commission.

  • 21 percent of agents reported that they grew their deal counts in 2023, while 54 percent said their deal counts meaningfully shrank.

And thanks in part to limited inventory and upward pressure on home prices throughout much of the year, not every agent even needed to do more deals in order to make more money.

  • 24 percent of agents said their businesses made more money in 2023 than they did the previous year, compared to 55 percent who reported they made less money year over year.

Chart by Daniel Houston

How they’re pulling it off

For those who were able to close more deals on behalf of clients, the improvement appeared to coincide with an increase in listing clients, rather than finding more homebuyers.

  • 23 percent of agent respondents reported having “heavier” or “substantially heavier” listing pipelines at the end of 2023 than they had the same time the previous year.
  • Only 11 percent of agents said the same of their buyer pipelines.

Across the board — whether their businesses were struggling or growing — agents reported having the greatest return on investment in today’s market when working to expand their sphere of influence.

  • 72 percent of agents selected “networking” or “sphere of influence” investment when asked what business development tactic has the best return on time or money in today’s market, forgoing options such as open houses, social media and lead-buying.

Some of this may be due to how the downturn is playing out differently in local markets. We can look to a recent Intel analysis for clues.

  • In states where housing prices are generally high and inventory is falling, Realtors are leaving the industry
  • But in more affordable markets where more listings are coming online, business prospects are better — and the ranks of agents are growing
  • National Association of Realtors membership is also rising in states where median days on market are falling faster, and price per square foot is on the rise.

For more on this topic, read the full Intel report.

Methodology notes: This month’s Inman Intel Index survey was conducted Dec. 21-31, 2023. The entire Inman reader community was invited to participate, and Intel received a total of 808 responses. Respondents for this survey were directed to the SurveyMonkey platform, where they self-identified their profiles within the residential real estate market. Respondents were limited to one response per device, but there was no limitation to IP addresses. Once a profile (residential real estate agent, mortgage broker/banker, corporate executive/investor/proptech, or other) was selected, respondents answered a unique set of questions for that specific profile. Because the survey did not request demographic information for age, gender, or geography, there was no data weighting. This survey will be conducted monthly, with both recurring and unique questions for each profile type.

Email Daniel Houston





Source link